Sydney to see small power bill relief ahead but country NSW still feels pressure

Power bills for Sydney households are set to drop but it's a different story for country NSW residents following the energy regulator’s decision on the revenues poles and wires companies can collect.

On Friday, the Australian Energy Regulator released its draft determination for the revenue that New South Wales poles and wires companies Ausgrid, Essential Energy and Endeavour Energy can collect for the next five years, and while they have fallen, nominal costs will increase for most households and businesses through to 2024.

While revenues collected by poles and wires companies have fallen, nominal costs will see power bills mostly rise by 2024.Credit:Daniel Acker

The forecast nominal increase is a blow to regional households, who were already paying some of the highest bills in the state, up to $1000 more than those in the city, according to St Vincent de Paul.

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Ausgrid customers in Sydney, the Hunter Valley and Central Coast will see savings of around $44 a year on their bills while small businesses are likely to save $104 from next year onwards, as Ausgrid collects $7.9 billion in revenue over five years.

Country NSW households under Essential Energy are facing a $70 increase in their power bills while small businesses are likely to see an extra $314 on top of their power bills, after the AER approved Essential’s plan to recover $5.3 billion in revenues from its customers.

Endeavour Energy will now be able to recover $4.4 billion in revenues from its customers from 1 July 2019 through to 2024, leading to a very small increase for households in Sydney’s west, the Blue Mountains, Illawarra, Southern Highlands and South Coast.

This will lead to a 0.4 per cent increase in Endeavour’s customers’ network charges, adding $6 a year for households and $12 a year for small business customers by the end of 2024. Endeavour Energy chief executive Tony Narvaez said this is less than the cost of inflation.

According to the Australian Energy Market Commission, the proportion of the costs of networks in household bills have dropped from 52 per cent down to 43 per cent, or around $700 a year, while the costs of generation and retail charges have risen to 52 per cent of the bill. Environmental and green schemes have fallen from around 7 per cent to 5 per cent of the bill.

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AER board member Jim Cox said the key focus of these five-yearly reviews of the networks' revenues “is on ensuring that consumers pay no more than necessary for safe and reliable electricity”.

“All three companies have achieved, or are on track to achieve, the operational efficiencies we set in our 2015 decisions. Consumers will continue to benefit from these lower levels of operating costs into the next regulatory period," he said.